Bank loan issue with my friend who purchased the car

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Your friend appears to be a bona fide purchaser, but the vehicle was already hypothecated to the bank. In such a situation, the bank has a primary charge over the vehicle, and therefore it may seek recovery of the loan or repossession of the car. However, your friend has legal remedies. First, he should file a detailed complaint before the police for cheating and criminal breach of trust against the seller under relevant provisions of the Indian Penal Code. If an FIR is already registered, he can participate in the investigation and produce all purchase documents, payment proofs, and transfer papers to establish that he purchased the vehicle in good faith. Secondly, he may file an application before the Magistrate under Section 451/457 of the Code of Criminal Procedure seeking interim custody (supurdgi) of the vehicle during the pendency of investigation. Further, your friend can also initiate a civil recovery suit against the absconding seller to recover the amount already paid. If the vehicle was transferred without bank NOC, the RTO records and loan hypothecation details should be examined. Proper legal action against the seller will be necessary to safeguard your friend’s rights.

Advocate Vinod Todiwan LawRato